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Monday, January 9, 2012

KCI / Airworld: Minor Submarket With Opportuniy For Major Growth

Though the KCI/Airworld Industrial submarket is a minor component of the overall Kansas City industrial market, it is an important submarket, due to its close proximity to Kansas City International Airport (KCI). KCI is the preferred location for air-cargo transporters in a six state region and is already a key player in the region’s distribution and logistics sectors. The location of the submarket does place it fairly far from some of the more active industrial parks, like North Kansas City’s Paseo Industrial and Kansas City, Missouri’s Executive Park. However, the excellent proximity to I-29 and I-435, allow easy access to all points in the city.

In addition, this submarket has exhibited more stability than the industrial market as a whole. This is partially due to the specialized nature of air transit-based tenants and the large national companies that are seeking a facility near an air cargo operation, like KCI. The flex portion of the submarket is the drag on occupancy with nearly 21% vacancy as opposed to only 3% in bulk warehouse space, demonstrating the area’s strength with large tenants. These statistics compare to the year-end 2010 occupancy rates, and the overall Kansas City industrial market’s $5.21 per square foot average rental rate, thus, making this submarket one of the bright spots in the Metro area.

KC Intermodal Business Centre

The KCI Intermodal Business Centre, which is now ready for vertical construction, will be a key factor in the growth of this market. This is planned to be an 800 acre development. Also, significant advancement took place in this submarket during 2011 with the Blount International lease for their 350,000 square foot distribution center, which is slated to be operational by early 2012. Click to read more about this transaction.

Due to the growth of this market and economic factors, I recommend that you keep an eye on this submarket as we progress into 2012.

Block Real Estate Services, LLC (BRES) is a full-service commercial real estate company managing over 33 million square feet of retail, office, and industrial properties for equity partnerships and third party owners. BRES’s portfolio of services continues its role as the most comprehensive commercial real estate firm in Kansas City by providing and specializing in: real estate brokerage services, tenant representation, investment services, asset and property management, economic incentives consultation, financial services, construction and development services, and the Block Funds.